Young employees are opting in to workplace pensions at a surprising rate,
according to the National Association of Pension Funds (NAPF).

Helen Forrest, head of policy and advocacy at NAPF called this “one of the most interesting aspects of auto-enrolment so far.” Young employees are said to be motivated by the knowledge that their financial burdens will never be lighter.

Reforms laid out in the Pension Act of 2008 will mean that all employees aged between 22 and state pension age who earn more than £9,400 a year will be automatically enrolled in workplace pension schemes, with legally defined minimum contributions from employers.

The scheme has been in force for large employers since October 2012, and is gradually being rolled out for all employers over the next few years. Younger employees or those who earn below the minimum can still choose to opt in to the scheme.

Feedback from the NAPF’s membership suggests that opt-ins were much higher than expected, particularly among under-22s.

"Interestingly, some of the responses from the young people were that the reason they are [opting in] now is because they won’t be able to afford to do it as much later," said Ms Forrest, speaking at a discussion hosted by consultancy Barnett Waddingham earlier this week.

The National Employment Savings Trust (Nest), the government-founded not-for-profit pension scheme which caters to many automatically enrolled employees, had received applications for slightly more than 1,000 opt-ins by the end of March.

Opt-outs have also been lower than expected. Nest has reported early indications of opt-out rates of around 10pc.